Albemarle Corporation · NYSE:ALB
Albemarle — Investor Day (September 2021)
116 slides from Albemarle's investor day presentation, Sep 10, 2021
Slide 1: Albemarle 2021 Investor Day
Albemarle 2021 Investor Day Making the World Safe & Sustainable September 10, 2021
Slide 2: Investor Relations Contacts
Investor Relations Contacts Meredith Bandy, CFA David Burke Katie Pyfer, PhD Vice President Director Manager Investor Relations and Sustainability Investor Relations Investor Relations Meredith.Bandy@albemarle.com David.Burke@albemarle.com Katheryne.Pyfer@albemarle.com +1 980-999-5168 +1 980-299-553
Slide 3: Forward-Looking Statements
Forward-Looking Statements Some of the information presented in this presentation, the investor day remarks, and discussions that follow, including, without limitation, statements with respect to product development, market trends, price, expected growth and earnings, demand for our products, capita
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures It should be noted that adjusted net income attributable to Albemarle Corporation (“adjusted earnings”), adjusted diluted earnings per share attributable to Albemarle Corporation, adjusted effective income tax rates, segment operating profit, segment income, pro-forma net
Slide 5: Agenda
08:30 am Welcome & Opening Remarks Meredith Bandy VP, Investor Relations & Sustainability Agenda 08:35 am Strategic Update & the Albemarle Way of Excellence Kent Masters Chief Executive Officer Bromine: Providing Critical Materials for Electrification and Netha Johnson 8:30am- Digitization President
Slide 6: Strategic Update & the Albemarle Way of Excellence
Strategic Update & the Albemarle Way of Excellence Kent Masters Chairman & CEO
Slide 7: Accelerating Growth to Meet Increasing Customer Demand
Accelerating Growth to Meet Increasing Customer Demand A global market leader with durable competitive advantages Track record of strong financial and operational performance Significant growth expected by 2026: ~$6-7B in revenue (>2x 2021); ~$2-3B in adj. EBITDA (>3x 2021); ~$2B in net cash from op
Slide 8: Key CEO Observations: Building on a Strong Foundation
Key CEO Observations: Building on a Strong Foundation Foundational Strengths Focus Areas Safety: Champion safety and our “Journey to Zero” Industry leading resources, technology, and scale Sustainability: Lead our industry in integrating sustainability with profitability Culture of continuous improv
Slide 9: Diverse Portfolio Generating Significant Cash
Diverse Portfolio Generating Significant Cash Business Overview Global ~5,900 Employees1 Lithium Bromine Specialties Catalysts Countries1 ~75 Dividend 27th consecutive year Increases ~40% ~35% ~25% of Net Sales5 of Net Sales5 of Net Sales5 Financial Highlights2 Net Sales $3.2B Net Income3 $703M Grow
Slide 10: Continuing to Build Our Sustainable Competitive Advantages
Continuing to Build Our Sustainable Competitive Advantages Portfolio of best- Ability to create Process technology Enhanced in-class assets value through and know-how sustainability and resources prudent portfolio across our around the globe management businesses Extensive product applications and t
Slide 11: Global Footprint – Strong Presence in Major Markets
Global Footprint – Strong Presence in Major Markets Amsterdam, Pasadena, TX, Kings Mountain, Netherlands U.S. NC, U.S. Xinyu, China Langelsheim, Silver Peak, Magnolia, Germany S NV, U.S. AR, U.S. Chengdu, Taichung, China Taiwan Safi, Jordan Niihama, JV JV Japan Business Unit: Lithium Bromine La Negr
Slide 12: Diverse and Dedicated Leadership Team Focused on Delivering Shareholder Value
Diverse and Dedicated Leadership Team Focused on Delivering Shareholder Value Kent Masters Scott Tozier Karen Narwold Melissa Anderson Chairman & CEO CFO CAO & General Counsel CHRO Experience: 30+ years Experience: 30+ years Experience: 30+ years Experience: 30+ years Jac Fourie Netha Johnson Raphae
Slide 13: Engaged, Diverse, and Accountable Board of Directors
Engaged, Diverse, and Accountable Board of Directors Racial Diversity White Black 67% 22% Laurie Brlas Kent Masters Glenda Minor Former EVP & CFO, Chairman & CEO, Former SVP & CFO, Newmont Mining Albemarle Evraz North America Hispanic 11% Jim O’Brien Diarmuid O’Connell Dean Seavers Gender Diversity
Slide 14: Progress to Achieve 2024 Targets; Accelerating Growth
Progress to Achieve 2024 Targets; Accelerating Growth behind in line ahead Progress 2019 Investor Day1 Updated Commentary to Date $4.7B – $5.3B 2024 Revenue Accelerating higher margin opportunities for Lithium and Bromine (6% - 9% 5-yr CAGR) $1.5B - $1.8B 2024 Adj. EBITDA Managing fixed costs and im
Slide 15: Sustainability Is Core to Our Long-term Strategy
Sustainability Is Core to Our Long-term Strategy GROW ▪ Pursue profitable growth; building capacity for strategic customer growth PROFITABLY ▪ Build capabilities to accelerate lower capital intensity, higher-return projects ▪ Optimize earnings, cash flow, and cost structure across all our businesses
Slide 16: Track Record of Portfolio Management Driving Value Creation
Track Record of Portfolio Management Driving Value Creation for Shareholders Rockwood Chemetall Surface Polyolefin Catalysts Wodgina Hard Rock Fine Chemistry Holdings Treatment Business Lithium Mine Services Year 2015 2016 2018 2019 2021 Price (USD) $5.7B $3.2B $416M $1.3B $570M Transaction Type Acq
Slide 17: Financial Flexibility to Execute Growth Strategy
Financial Flexibility to Execute Growth Strategy Strategic Requirements Longer-term: Partnerships to Specialized, Buy or build assets to Continue to build complement next-gen technology strengthen portfolio world-class resource portfolio and and/or materials base expertise Financial Criteria Minimum
Slide 18: Strategic Execution and the Albemarle Way of Excellence (AWE)
Strategic Execution and the Albemarle Way of Excellence (AWE) Purpose Making the world safe and sustainable by powering potential Operating Model: Values AWE How We Care • Curiosity • Courage • Collaboration Execute & Humility • Integrity • Transparency Accelerate Our Strategy Strategy Grow • Maximi
Slide 19: Implementing Our Execution Principles & Goals
Implementing Our Execution Principles & Goals High-Performance Competitive Operational Sustainable Culture Capabilities Discipline Approach HSE Excellence Talent Business Excellence Sustainable Shareholder Value ▪ Strive toward an interdependent safety ▪ Build the best global workforce by ▪ Meet or
Slide 20: Execute Portfolio of Projects to Achieve Sustainability Ambitions
Execute Portfolio of Projects to Achieve Sustainability Ambitions Next two years 2030 2050 Build… Reduce… Grow… Target… the infrastructure to the carbon-intensity of the intensity of our Lithium business net zero carbon assess, measure and our Catalysts and freshwater usage by in a carbon-intensity
Slide 21: AWE in Action: Journey to Excellence (J2E) Initiative
AWE in Action: Journey to Excellence (J2E) Initiative ▪ Initial focus on Operational Discipline and Core Competencies ▪ Fast-cycle initiative focused on six critical areas for step change in execution and performance Effective & Manufacturing Maximize cash flow generation Efficient Enable GBU strate
Slide 22: Bromine Specialties: Providing Critical Materials for Electrification and Digitization
Bromine Specialties: Providing Critical Materials for Electrification and Digitization Netha Johnson President, Bromine Specialties
Slide 23: A Global Market Leader with Value Added Services and Growing Customer Base
A Global Market Leader with Value Added Services and Growing Customer Base Leveraging scale and world-class resources for growth investments Expanding end markets and new applications drive a growth rate higher than GDP Executing projects to expand share and generate returns as market grows Powering
Slide 24: A Leader Across Diverse End-Use Markets
A Leader Across Diverse End-Use Markets TTM Q2 2021 7% 8% 10% $1.1B $355M 33% Net Sales Adj. EBITDA1 Adj. EBITDA Margin1 60% 15% GBU Characteristics Business Environment Net Sales by Applications2 ▪ Access to world-class natural resources with low- ▪ Diversified and growing end-market applications c
Slide 25: On Track to Meet or Exceed 2024 Targets
On Track to Meet or Exceed 2024 Targets behind in line ahead 2019 Investor Day Updated Commentary STATUS ▪ 1% OEE improvements will generate >$1.6M ▪ 1% OEE improvements generated >$2-3M Low-Cost additional EBITDA in 2020 additional EBITDA in 2020 Operational Excellence ▪ $54M annualized productivit
Slide 26: Access to Highly Concentrated Bromine is a Low-Cost Advantage
Access to Highly Concentrated Bromine is a Low-Cost Advantage Bromine Concentration2 Albemarle Operates from Two (ppm) World-Class Bromine Resources: Dead Sea Concentrate Arkansas India Concentrate Dead Sea, Jordan China Seawater Jordan Bromine Company1 (JBC) - operated 0 1000 2000 3000 4000 5000 60
Slide 27: Expanding Markets in Core and New Businesses to Accelerate Growth
Expanding Markets in Core and New Businesses to Accelerate Growth BROMINE IN OUR WORLD Consumer Telecom Buildings Electronics Automotive Energy Ag / Pharma Polymers Wiring Insulation Circuit Boards Tires Oilfield PET Disinfectants Connectors Wiring Enclosures Seats Completion Textiles Pharmaceutical
Slide 28: Large and Growing Consumer Polymers Market
Large and Growing Consumer Polymers Market World Consumption of PET Polymer (2019) ▪ Polyethylene Terephthalate (PET) is the most widely used polymer in the world with expanding use in emerging economies Western & Central Europe ▪ Applications include textiles fibers and consumer packaging Mainland
Slide 29: 5G Drives Expanding Telecom Use
5G Drives Expanding Telecom Use AR/VR Experiences ▪ Large and growing existing market with upside from new Utilities & applications Infrastructure ▪ Flame retardant products are integral to wire and cable, connectors, and circuit boards Cloud & Data Centers Autonomous Medical Vehicles Devices IoT De
Slide 30: Automotive Use is Accelerating with Trend to EVs
Automotive Use is Accelerating with Trend to EVs ▪ Solid existing market for flame retardants used in ICE vehicles Displays ▪ New and accelerating utilization with trend to EVs and growing sensors usage High Voltage Wiring Charging Stations Wiring Harness EV Applications Battery Casing EV/ ICE Appli
Slide 31: Strategy to Maximize EBITDA through Growth and Productivity
Strategy to Maximize EBITDA through Growth and Productivity GROW ▪ Capitalize on growth in existing, new, and expanding applications PROFITABLY ▪ Execute customer-focused product innovation MAXIMIZE ▪ Structurally reduce costs through asset efficiency and productivity PRODUCTIVITY ▪ Maximize value p
Slide 32: Competitive Capabilities: Research & Technology
Competitive Capabilities: Diverse and Healthy New Research & Technology Product Pipeline New Product Innovation SAYTEX ALERO™ ▪ Market research driven ▪ Polymeric flame retardant (stable, large molecule) ▪ Favorable mechanical properties ▪ Strong IP positions ▪ Superior environmental profile ▪ World
Slide 33: Operational Discipline: Manufacturing Excellence & Capital Project Execution
Operational Discipline: Track Record of Manufacturing Excellence & Delivering Expansions Capital Project Execution 2021 New Well in Magnolia ▪ Improvement in manufacturing ▪ On-budget and early start-up excellence (higher volumes, lower ▪ Highest bromide concentration cost) requires focus on continu
Slide 34: Sustainable Approach: Improving Productivity and Sustainability
Sustainable Approach: Improving Productivity and Sustainability Natural Resources Management Sustainability program examples: Material reduction targets by 2025 Waste heat integration projects at JBC (on an intensity basis, per mt Br2) Waste evaporation pond elimination at JBC Jordan Bromine Company
Slide 35: Bromine Specialties Accelerating Growth Due to Expanding Markets
Bromine Specialties Accelerating Growth Due to Expanding Markets and New Applications Such as Global Electrification and Digitization Adj. EBITDA Margin 32% - 33% Net Sales (2021E) $1B - $1.1B (2021E) 32%-36% BUSINESS ENVIRONMENT: ▪ Flame retardants (2026E) ‒ Expect growth in core and new markets dr
Slide 36: Key Takeaways
A global market leader and world-class resources, diversified product portfolio Growth business, with upside and attractive returns Key Capitalizing on the growing market with a low-capital intensity Takeaways growth plan Deep understanding of elemental bromine and derivatives generates value and cr
Slide 37: Catalysts: Positioning to Execute on Long-term Opportunities
Catalysts: Positioning to Execute on Long- term Opportunities Raphael Crawford President, Catalysts
Slide 38: Fundamentally Strong Business with New Growth Opportunities
Fundamentally Strong Business with New Growth Opportunities Core competencies: strong customer focus, proprietary technologies, distinctive partnerships, and application knowledge Access to global network through strategic JV partnerships – FCCSA, Nippon Ketjen, and Eurecat Extensive product applica
Slide 39: A Leader in Refining and Petrochemical Catalysts
A Leader in Refining and Petrochemical Catalysts TTM Q2 2021 20% $762M $106M 14% 50% Net Sales Adj. EBITDA1 Adj. EBITDA Margin1 30% GBU Characteristics Business Environment Net Sales by Application2 • Portfolio of global best-in-class assets • FCC: Refinery output expected to shift from fuels • Exte
Slide 40: Tracking Our Progress Against What We Said in 2019
Tracking Our Progress Against What We Said in 2019 behind in line ahead 2019 Investor Day Updated Commentary Progress to Date ▪ Continuous improvement model ▪ Deploying operating model Core Strategy: Low- ▪ Organization focus on FCF metrics ▪ Focus on cash flow generation capacity Cost Operational E
Slide 41: FCC Catalysts Improve Yields and Lower Costs for Refiners
FCC Catalysts Improve Yields and Lower Costs for Refiners Estimated FCC Market Demand 1 Segment Characteristics Vacuum Gas Max Oil (VGO) Petrochemicals ▪ FCC catalysts are used to crack oil feedstock into gasoline 30% and chemicals; continuously fed into FCC units 20% ▪ ~600 FCC units globally, each
Slide 42: CFT Catalysts Remove Sulfur and Contaminants
CFT Catalysts Remove Sulfur and Contaminants to Improve Sustainability Estimated CFT Market Demand1 Segment Characteristics Distillates (e.g., ▪ CFT includes primarily hydro processing catalysts (HPC) Vacuum Gas 20% diesel, jet fuel) Oil (VGO) ▪ ~3,000 HPC units globally, each requires replacement H
Slide 43: PCS Catalysts Used in Growing End-use Applications
PCS Catalysts Used in Growing End-use Applications Segment Characteristics Estimated PCS Market Demand1 Segment Characteristics Organometallic 45% ▪ Organometallic (OM) co-catalysts used in the manufacture of alpha-olefins, polyolefins, and electronics ▪ Curatives include a range of curing agents us
Slide 44: Aligning Growth Opportunities with Major Macrotrends
Aligning Growth Opportunities with Major Macrotrends Refining capacity continues to expand in emerging markets Demand for renewables and recycling applications is like India and SE Asia increasing, led by North America SE Asia & India Demand Diesel Renewable Diesel Demand (million bpd) Jet fuel (mil
Slide 45: Pivoting to Long-term Sustainable Growth
Pivoting to Long-term Sustainable Growth GROW ▪ Expand presence in growth areas: Southeast Asia/India, crude-to-chemicals, and renewables PROFITABLY ▪ Accelerate regional sales through commercial outreach and local support MAXIMIZE ▪ Balance cost structure with a declining core refining market and i
Slide 46: Leveraging Our Core Skills in Growth Markets
Petrochemicals Demand & New Crude-to-Chemicals Leveraging Our Core Skills in Growth Technologies Drive FCC Industry Growth Beyond Markets “Peak Gasoline” Outlook: Traditional Refinery Crude Oil-to-Chemicals Product Slate Refinery Product Slate ▪ Emerging Growth Regions: Anticipate demand Chemicals g
Slide 47: Accelerating Renewables Platform: HVO & Pyrolysis
Accelerating Renewables Platform: HVO & Partnering with leaders on Pyrolysis – Both Relate to Sustainability renewables 20-year relationship with Neste, a front runner in renewable fuels Outlook: research and manufacturing ▪ Hydrotreated Vegetable Oil (HVO): Continued Partnered in the developmen
Slide 48: Operational Discipline: Manufacturing Excellence Case Study: Project AI
Operational Discipline: Case Study: Manufacturing Excellence Project Artificial Intelligence (AI) ▪ Began at Bayport in 2021; currently underway at Amsterdam and La Negra; to be rolled out at Xinyu and ▪ Project AI implements advanced data analytics Magnolia in our existing chemical process and qual
Slide 49: Sustainable Approach: Reducing GHG Emissions
Sustainable Approach: Reducing GHG Emissions Natural Resources Management ▪ Switch to renewable energy eliminates Scope 2 emissions ▪ Executing projects to reduce the carbon- from purchased electricity intensity of our Catalysts business by 35% ▪ Dutch national initiative targets additional Scope 1
Slide 50: 5-year Outlook as We Pivot to Long-term Sustainable Growth
5-year Outlook as We Pivot to Long-term Sustainable Growth Adj. EBITDA Margin 11% - 13% BUSINESS ENVIRONMENT Net Sales (2021E) FCC ▪ Growth in SE Asia and India $745M - $785 M (2021E) 26%-28% ▪ North American market flat and trending down in Europe ▪ Opportunities with petrochemical integration and
Slide 51: Key Takeaways
Improving market outlook, expected to rebound strongly from COVID-related lows Leveraging core competencies: Proprietary technologies, distinctive partnerships, application knowledge, and strong customer relationships Key Pivoting for long-term sustainable growth in Asia, crude to chemicals, Takeawa
Slide 52: Enabling the EV Revolution
Enabling the EV Revolution Eric Norris President, Lithium
Slide 53: Accelerating Growth to Meet Increasing Customer Demand
Accelerating Growth to Meet Increasing Customer Demand Diversified across geographies, products, and resources; ample, world- class resource capability Lithium industry demand expected to reach 1.14 million MT LCE by 2025, ~30% CAGR driven by increasing EV sales volumes and battery size1 Proven trac
Slide 54: Well-positioned to Remain a Leader as Growth Accelerates
Well-positioned to Remain a Leader as Growth Accelerates TTM Q2 2021 20% $1.2B $436M 36% Net Sales Adj. EBITDA1 Adj. EBITDA Margin1 20% 60% GBU Characteristics Business Environment ▪ A leader in battery, industrial, and specialty grade lithium ▪ Volume growth driven by energy storage Net Sales by Ap
Slide 55: On Track to Meet or Exceed Expectations from 2019
On Track to Meet or Exceed Expectations from 2019 behind In line ahead 2019 Investor Day Updated Commentary Progress to Date ▪ 175 ktpa nameplate capacity by 2021 ▪ 175 ktpa nameplate capacity by Q1 2022 Executing Our ▪ 225 ktpa nameplate capacity by 2024 ▪ Up to ~450-500 ktpa nameplate capacity by
Slide 56: A Leader in High-Growth Energy Storage Business
A Leader in High-Growth Energy Storage Business Energy Storage Industrials Specialties EVs and eMobility Specialty Glass Healthcare Grid Storage Lubricants Pharmaceuticals Electronics Automotive Agriculture Est. Market Demand 20201 ~$2B ~$1B ~$0.5B Est. Volume Growth 2020-2025 CAGR1 35-40% 2-4% 3-5%
Slide 57: Established Processes for Conventional Resources
Established Processes for Conventional Resources Continuous improvement through optimization, efficiency, technology advancements Resource Extraction Lithium Conversion Lithium Products Battery and Technical Grade Hard Rock 6% Li2O Concentrate Lithium Hydroxide 0.5- 2.5% Li2O Xinyu, Chengdu, Kemerto
Slide 58: Diversified, Global Asset Base – Presence in Major Geographic Markets
Diversified, Global Asset Base – Presence in Major Geographic Markets New Johnsonville, TN, U.S. Langelsheim, Germany Kings Mountain, Xinyu, NC, U.S. China Silver Peak, NV, U.S. Magnolia, Chengdu, Taichung, AR, U.S. China Taiwan Antofalla, Argentina La Negra, Chile Salar de Atacama, Chile Wodgina, G
Slide 59: Lithium Demand Driven by EV Penetration and Battery Size
Lithium Demand Driven by EV Penetration and Battery Size Lithium Demand by Application1 EV Production1 Battery Size (EV Average) 1 (ktpa LCE) (Vehicle Units) (kWh per EV) Battery Grade - EV BEV - Battery EV Battery Grade - Other PHEV - Plug-in Hybrid EV Specialty/Technical Grade 35M 71 Inventory Cha
Slide 60: Overall Market Expected to be Tight Through 2026
Overall Market Expected to be Tight Through 2026 Carbonate1 2026 Li2CO3 Hydroxide1 Base Demand 2026 LiOH Cash Cost ($/kg LCE) Base Demand Low Case High Case Low Case High Case 0 100 200 300 400 500 600 0 100 200 300 400 500 600 700 800 900 Potential Capacity (kT LCE) Potential Capacity (kT LCE) Outl
Slide 61: Long-term Strategy Focused on Sustainable Growth
Long-term Strategy Focused on Sustainable Growth ▪ Accelerate growth to meet demand from strategic customers GROW ▪ Expand conversion capacity to utilize low-cost, world-class resource base PROFITABLY ▪ Innovate next generation lithium technology for increased energy density MAXIMIZE ▪ Drive commerc
Slide 62: World-Class Resource Base Supports Low-Cost Position
World-Class Resource Base Supports Low-Cost Position Lithium Brine Resources Lithium Mineral Resources 1800 2.5% 1600 Greenbushes, Australia1 Salar de Atacama, Chile 1400 2.0% Lithium Content (mg/L) Lithium Content (% Li2O) 1200 Kings Mountain, NC3 1000 1.5% 800 Wodgina, Australia2 1.0% 600 Antofall
Slide 63: Track Record of Growing Conversion Capacity to Meet Demand
Track Record of Growing Conversion Capacity to Meet Demand Estimated Lithium Nameplate Conversion Capacity1 Carbonate figures on ktpa LCE basis, hydroxide figures on ktpa LiOH basis >400 50 175 Available Resources to More than Double Current Capacity 40 20 ~175 15 20 30 2015 Post 2016 2018 2021 2021
Slide 64: Investing to Align Capacity with Market Demand
Investing to Align Capacity with Market Demand Estimated Lithium Nameplate Conversion Capacity Carbonate figures on kTpa LCE basis, hydroxide figures on kTpa LiOH basis Wave 3 Potential Projects (3-5 years) ~$1.5B CapEx • Silver Peak, Nevada ~450-500 ~125-175 • China (JV) • China (100%) ~150 • Kemer
Slide 65: Operational Discipline: J2E Manufacturing Excellence Program
Operational Discipline: Case Study: Manufacturing Excellence J2E Manufacturing Excellence Program ▪ 2021: Engaged third party assistance to implement at La Negra, Langelsheim, and Salar; internal teams will ▪ Manufacturing Excellence implement at smaller sites Management Systems (MEMS): ▪ 2022: Xiny
Slide 66: Competitive Capability: Know-how in Extraction and Process Technology
Competitive Capability: Know-how in Extraction and Process Technology CONCENTRATION CONVERSION (Lithium Hydroxide) Crystallization with Caustic SPODUMENE Sulfuric Acid Flotation or Dense Crushing + Milling Media Separation Li2CO3 Leaching Crystallization Crystallization Calcination Purification with
Slide 67: Developing Novel Materials to Enable Next Generation Battery Performance
Developing Novel Materials to Enable Next Generation Battery Performance Legacy Advanced Next Generation Established Technologies in Use (Current) New Technologies in Commercialization (~2020-2025) New Technologies in Development (2025+) e.g., LFP and higher cobalt chemistries e.g., NMC 622, NMC811
Slide 68: Differentiated Approach to Customer Partnerships and Contracting
Differentiated Approach to Customer Partnerships and Contracting Commitment to LTAs is Unchanged Contracting Approach is Evolving ▪ 70%+ of battery grade sales on multi-year commitments to support ▪ Strategically segmenting customers by key requirement – price, aggressive expansion security of suppl
Slide 69: Lithium Growth Accelerating Due to Electrification of Transportation
Lithium Growth Accelerating Due to Electrification of Transportation Adj. EBITDA Margin 32% - 34% Net Sales (2021E) BUSINESS ENVIRONMENT: $1.3B - $1.4 B (2021E) 43%-47% Energy Storage (2026E) ▪ Pricing environment expected to improve as supply becomes more balanced in the mid-term; expect strong EV
Slide 70: Key Takeaways
Albemarle has a broad range of resources, manufacturing capabilities, products, and customer relationships Global Lithium demand is on track to reach 1.14 million MT LCE by 2025, a ~30%+ CAGR1 Key Projected growth in lithium demand cannot be met without leveraging the largest and most highly concent
Slide 71: Sustainable Lithium Production
Sustainable Lithium Production Ellen Lenny-Pessagno VP, Lithium Sustainability
Slide 72: How We Produce Lithium is as Important as How Much We Produce
How We Produce Lithium is as Important as How Much We Produce Lithium production focused on minimizing environmental and social impact and maximizing stakeholder benefit ▪ Plan to grow Lithium business in a carbon-intensity neutral1 manner through 2030 – Includes ~30% reduction in hydroxide carbon f
Slide 73: Managing our Carbon Footprint and Reducing GHG Emissions
Managing our Carbon Footprint and Reducing GHG Emissions Passive solar energy Reducing GHG Greening the electricity Deploying electric makes up 78% of total emissions in China mix at Kemerton and La vehicles Albemarle energy Negra consumption In 2017, Albemarle Electric forklifts in converted the en
Slide 74: The Atacama Basin: Saline Interphase
Responsible Water Management The Atacama Basin: Saline Interphase Case Study: Salar de Atacama At the saline interphase: Albemarle uses <1% of the freshwater rights1 in the Salar de Atacama ▪ Naturally occurring, low permeability sediments act as a barrier between the groundwater and the brine Albe
Slide 75: Environmental Monitoring of Salar de Atacama with Local Community
Environmental Monitoring of Salar de Atacama with Local Community Extensive efforts to support Our hydrogeological model and monitoring data demonstrate that brine responsible lithium production pumping does not adversely affect the upstream groundwater levels Fresh water levels well above threshold
Slide 76: Collaborating with and Contributing to Our Communities Around the World
Collaborating with and Contributing to Case Study: Managing our environmental Our Communities Around the World and social impacts in the Salar de Atacama Maintain positive relations with communities in which we Agreement with the Council of Atacameñan Peoples (CPA) operate through open, transparent
Slide 77: Partnering with IRMA to Assure the Sustainability of Our Lithium Production
Partnering with IRMA to Assure the Sustainability of Our Lithium Production Initiative of Responsible Mining Assurance (IRMA) ▪ Objective, independent third-party verification of Leading the Way for Sustainable Lithium Production industrial-scale mine sites ▪ Comprehensive definition of responsible
Slide 78: Working to Advance Lithium Recycling in the Circular Economy
Working to Advance Lithium Recycling in the Circular Economy Lithium from recycled batteries will play a valuable role in meeting demand projections ▪ Applying proprietary processing know-how, and adapting conversion plant designs, for future recycling feedstocks ▪ Develop partnerships across the va
Slide 79: Capital Projects: Capability to Deliver Growth
Capital Projects: Capability to Deliver Growth Jac Fourie Chief Capital Projects Officer
Slide 80: Foundation in Place for Significant and Sustainable Growth
Foundation in Place for Significant and Sustainable Growth Capability to Execute Large-Scale Projects ▪ Launched capital investment committee Assist with Board oversight of capital projects Strong Project Execution and strategic execution through COVID-19 Restrictions, Global Supply ▪ Launched Albem
Slide 81: The Albemarle Project Process: Disciplined Approach to Project Delivery
The Albemarle Project Process: Disciplined Approach to Project Delivery Developing capabilities to consistently deliver high-return projects, on-time and within budget ▪ Standardizing project development and decision approach to accelerate project cycle times ▪ Establishing criteria to identify and
Slide 82: Leveraging Strong Talent and Best Practices Across Projects
Leveraging Strong Talent and Best Practices Across Projects Building and transitioning teams across projects over time • Diverse global team (Houston, Santiago, 2018 2019 2020 2021 2022 2023 2024 2025 2026 Amsterdam, Shanghai, Perth) Chile • Projects staffed primarily La Negra II o La Negra III / IV
Slide 83: Technical Building Blocks to Replicate Projects and Accelerate Growth
Deep internal expertise in process technology, from the mine to the final product Technical Building Blocks to Replicate Partnerships with multinational EPCs1 and with leading Local Design Institutes in China Projects and Accelerate Growth Best-in-class engineering standards applied for safety and s
Slide 84: Disciplined Project Planning and Execution Drive Strong Investment Returns
Disciplined Project Planning and Execution Drive Strong Investment Returns Illustrative Lithium Capital Intensity Range (Cost/kg) Expected Key Drivers of Cost Reduction ~40% lower ▪ Repeating proven designs ▪ Leverage expertise in large-scale project construction ▪ Take advantage of brownfield econo
Slide 85: Financial Flexibility to Accelerate Growth
Financial Flexibility to Accelerate Growth Scott Tozier Chief Financial Officer
Slide 86: Financial Flexibility to Accelerate Growth
Financial Flexibility to Accelerate Growth Strong history of execution and investment in high-return projects Reaffirming 2021 financial targets and introducing 2026 outlook with accelerated growth Deployment of AWE operating model enhances low-cost competitive positioning Capacity for cash generati
Slide 87: History of Strong Financial Performance
History of Strong Financial Performance Focused Portfolio Financials on a Pro-forma Basis (in billions) Strong margin businesses, 5-year targets: Lithium 43% - 47% Net Sales1 Adj. EBITDA & Margin1,2 Bromine 32% - 36% 35% - 39% Catalysts 26% - 28% $4.00 $6.3 - $6.7 32% - 37% $3.50 30% $3.00 29% 29% $
Slide 88: Reaffirming Full Year 2021 Guidance and 2022 Outlook
Reaffirming Full Year 2021 Guidance 2022 Outlook Company: FY 2021 Adj. EBITDA up 25%-35%, or 30%- Guidance 40% pro forma excluding FCS CAPEX of $1.0-$1.3B Net Sales $3.2B - $3.3B Adj. EBITDA $775M - $815M Lithium: 40%-50% Adj. EBITDA growth with Adj. EBITDA Margin 24% - 25% new capacity coming on-li
Slide 89: Building a Strategically Advantaged Supply Chain
Building a Strategically Advantaged Supply Chain Key Initiatives Benefits Reorganize enterprise supply chain and create center of 01 ▪ Improvements in end-to-end supply chain excellence process effectiveness and process standardization 02 Establish one procurement framework – SAP Ariba Suite ▪ Incre
Slide 90: Optimize Back Office Support
Optimize Back Office Support Key Initiatives Benefits Support GBU strategic growth plans with business services 01 excellence ▪ Enhanced back office strategic partnership with GBUs with a focus on process effectiveness Establish a business process excellence team and incorporate and efficiency 02 Le
Slide 91: Journey to Excellence: Leveraging Operational Excellence
J2E Leveraging Operational Excellence to Enhance Low-cost Position Manufacturing Spend & Sales & Administration Operational Efficiency ▪ Business process excellence ▪ Raw material yield and cost reduction ▪ Efficiencies from IT ▪ Energy and waste reduction investments and global systems ▪ Increase O
Slide 92: Prioritizing Capital Allocation to Support Growth Strategy
Prioritizing Capital Allocation to Support Growth Strategy Invest to Grow Profitably Maintain Financial Flexibility • Prioritize investment in growth • Committed to Investment Grade rating • Strategically grow lithium capacity – near-term focus on conversion • Long-term Net Debt to Adj. EBITDA targe
Slide 93: Significant Operating Cash Flow for Investment in Accelerated Growth
Significant Operating Cash Flow for Investment in Accelerated Growth $2.0 - $2.2 Highlights Cash Flow1 ~30% CAGR (billions) 2021E-2026E • Net Cash from Operations Net Cash from Ops improving on revenue growth Capital Expenditures and improved operating $0.8 - $1.2 Free Cash Flow ~19% CAGR $1.1 - $1.
Slide 94: Disciplined Balance Sheet Management Allows Flexibility to Accelerate Growth
Disciplined Balance Sheet Management Allows Flexibility to Accelerate Growth Net Debt to Adjusted EBITDA1 Selected Financial Metrics ($ in millions, as of 6/30/2021) Target Long-term Leverage Range: Dividends Paid (TTM) $169 2.5x 2.0x Dividend Growth (Y/Y) 6.8% Cash Balance2 $824 2.1x- 1.8x- 0.8x- 0
Slide 95: Strong Financial Position Results in Strategic Flexibility
Strong Financial Position Results in Strategic Flexibility Credit Ratings: Maturity Profile ($ in millions, as of 6/30/2021) S&P BBB Stable Moody’s Baa3 Stable Fitch BBB Stable $597 • Committed to maintaining Investment Grade credit rating $450 $425 • Significant liquidity (~$2.0B); $1.0B untapped c
Slide 96: Committed to Supporting Our Dividend
Committed to Supporting Our Dividend $2.00 Dividends per Share ~3% CAGR 2019-2021E $1.60 Dividend Cash from Ops Payout Ratio: Payout Ratio: ALB1 32% 29% $1.20 Specialty Chemicals2 29% 23% ~12% CAGR $0.80 1994-2019 $0.40 $0.00 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Slide 97: Long-term Financial Targets
Long-term Financial Targets Lithium Bromine Catalysts Total1 Assumptions: • $100M run-rate gross Net Sales productivity savings (5 yr CAGR) 24% - 28% 5% - 6% 6% - 8% 13% - 17% by 2024 • 20% effective tax rate Adj. EBITDA Margin • Currency flat at (2026E) 43% - 47% 32% - 36% 26% - 28% 35% - 40% Janua
Slide 98: Key Takeaways
Significant Growth Expected by 2026: ~$6-7B in Revenue (>2x 2021); ~$2-3B in Adj. EBITDA (>3x 2021); ~$2B in Cash from Operations (>3x 2021) Confident in our ability to deliver value given investment in technology, talent, and operational excellence Key Committed to achieving cost savings of >$100M,
Slide 99: Leadership Bios
MAKING THE WORLD SAFE AND SUSTAINABLE A ALBEMARLE’
Slide 100: Kent Masters
Kent Masters was named Chairman, President and Chief Executive Officer of Albemarle Corporation in April 2020. He joined the Albemarle board of directors in 2015 and served as Lead Independent Director from 2018 until April 2020. Masters brings significant global business experience and a strong kno
Slide 101: Netha Johnson
Netha Johnson joined Albemarle in 2018 as President of Bromine Specialties business unit after more than 20 years of diverse leadership experience, both domestically and internationally. He has worked extensively in Singapore, Malaysia, Taiwan, Japan, and Germany. Prior to joining Albemarle, Johnson
Slide 102: Raphael Crawford
Raphael Crawford joined Albemarle in 2012 as Vice President of the Performance Catalyst Solutions division. In 2015, he was appointed Vice President of the Synthesis and Polymer Solutions division, as well as the Managing Director for Rockwood Lithium GbmH in Germany. Later in 2015, Crawford was app
Slide 103: Eric Norris
Eric Norris joined Albemarle in January 2018 as Chief Strategy Officer. In this role, he managed the company’s strategic planning, M&A, and corporate business development programs as well as its investor relations efforts. In August 2018, he was appointed President of the Lithium global business uni
Slide 104: Ellen Lenny-Pessagno
Ellen Lenny-Pessagno serves as Vice President, Lithium Sustainability. Lenny-Pessagno supports the execution of the corporate strategy, leads Albemarle's relationship with government entities and the local community, guides the development and execution of environmental policy, management and compli
Slide 105: Jac Fourie
Jac Fourie joined Albemarle in January 2019 as Vice President, Engineering and Project Execution. In his role, he is responsible for Albemarle’s engineering, project development, and project execution activities across major projects and sustaining capital. In June 2021, he was appointed Chief Capit
Slide 106: Scott Tozier
Scott Tozier joined Albemarle in January 2011. He serves as Executive Vice President and Chief Financial Officer. In this role, Tozier is responsible for all financial and fiscal management aspects of the company’s operations. Tozier sets internal controls within the organization to protect the fina
Slide 107: Meredith Bandy
Meredith Bandy serves as Albemarle’s Vice President, Investor Relations & Sustainability. In this role, she oversees the company’s sustainability reporting and corporate initiatives and leads its investor relations efforts. Bandy joined Albemarle in March 2020 with 22 years of experience in investor
Slide 108: Appendix
— ——— Appendix MAKING THE WORLD SAFE AND SUSTAINABLE AV ALBEMARLE’
Slide 109: Adjusted EBITDA (twelve months ended)
Adjusted EBITDA (twelve months ended) Twelve Months Ended December 31, Twelve Months Ended ($ in thousands) 2017 2018 2019 2020 June 30, 2021 Net income attributable to Albemarle Corporation $ 54,850 $ 693,562 $ 533,228 $ 375,764 $ 703,213 Depreciation and amortization 196,928 200,698 213,484 231,98
Slide 110: Adjusted EBITDA - by Segment (twelve months ended)
Adjusted EBITDA - by Segment (twelve months ended) Twelve Months Ended ($ in thousands) Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Lithium Net income attributable to Albemarle Corporation $ 250,572 $ 217,538 $ 277,711 $ 299,101 $ 307,656 Depreciation and amortization 106,862 11
Slide 111: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 1 This supplemental is for net-debt-to-adjusted EBITDA ratio based on the bank covenant definition. 111
Slide 112: Free Cash Flow
Free Cash Flow Twelve Months Ended December 31, ($ in thousands) 2017 2018 2019 2020 Net Cash from Operations $ 303,979 $ 546,165 $ 719,374 $ 798,914 Pro-forma: Net impact of Net cash from operations from divested businesses (13,000) (22,673) (30,200) (90,200) Pro-forma Net Cash from Operations $ 29
Slide 113: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest Twelve Months Ended June 30, 2021 December 31, 2020 June 30, 2020 Noncontrolling Noncontrolling Noncontrolling ($ in thousands) Equity Income Interest Equity Income Interest Equity Income Interest Lithium 81,647 — 96,155 — 92,389 — Bromine Specialties — (79,
Slide 114: Production Facilities
Production Facilities Location Business Segment Principal Use Owned/Leased Greenbushes, Australia Lithium Production of lithium spodumene minerals and lithium concentrate Owned(d) Kemerton, Australia(a) Lithium Production of lithium carbonate and technical and battery-grade lithium hydroxide Owned(d
Slide 115: Glossary
Glossary • Brine: strong saline solution • HBr: hydro bromic acid • OEM: original equipment manufacturer • CAGR: compound annual growth rate • ICE: internal combustion engine • PPM: parts per million • Calcination: heating to a high temperature • JV: joint venture • Purification: removal of contamin
Slide 116: www.albemarle.com
NYSE www.albemarle.com A\ALBEMARLE’